Is Now A Good Time To Buy a Home In Charleston, SC?
The "overall" answer is YES. The "affordability index" (i.e. the relationship between home prices and interest rates) is at a very high level.
Most of the Charleston area (excepting Mount Pleasant and some segments of Daniel Island, areas in which the real estate market has turned around and prices are firming up) are still oversupplied - more than 6 months' inventory - and therefore prices are still soft (buyer's market).
Bear in mind that in our opinion the most important factor to consider right now (if you plan to borrow money) are interest rates. A 1% hike in interest rates will decrease your buying power by about 10%. And at this point it seems much more likely that interest rates could increase by 1% than the likelihood of home prices decreasing or increasing by 10%.
In addition, new construction projects are sprouting all around the metro area, offering new homes at very competitive prices. However, given the renewed construction activity nationwide, demand for materials and labor will increase rapidly and it is our prediction that construction prices will rise in 2013, which means that builders will have to increase their prices to keep their margins.
Lastly, sellers are still "conditioned" by the market into paying buyer's closing costs as part of the negotiation. We don't believe this trend will last long as the market recovers.
If you plan to borrow money, our answer is a strong "Yes". Buy now!
If you plan to pay cash, there are still great buying opportunities out there in short sales and foreclosures at below-market prices. Many investment properties are providing positive cash flows that vastly exceed returns in savings or money market accounts.
We are very bullish about the economic fundamentals for the Charleston, SC metro area in the coming years. Employment growth is stronger than in many other areas, and the city is getting a lot of attention from the U.S. and abroad: (Charleston just won "the best city for tourism in the world" accolade from Conde Nast Travel Magazine, Summerville just got rated as one of the 25 best places to retire to by CNN). Where there is growing demand, real estate prices will recover faster!
Ready to buy in Charleston? Contact us, we'd be glad to help!
The Alan Donald Real Estate Team
Keller Williams Realty
Please contact us if you have any questions or comments.